After a long time, a brand other than Apple is creating a global buzz about the impending launch of one its product. Sony with the launch of PlayStation 3 seems to have stuck a chord with consumers once again after a long hiatus. It was high time that one of the world’s iconic brands started reclaiming its rightful position as the leader of the consumer electronics market. Even though PlayStation 3 seems to have brought back some energy and zest for the brand, it is an irony that the life of such a strong global brand has come to depend on a single product.
As one of the pre-eminent global consumer electronics brand which has enjoyed unparallel brand equity and loyalty, Sony is surprisingly a classic case study for what a brand should not do to erode its own brand standing in the market place. Over the last couple of years, Sony has been gradually but surely slipping from its ivory tower and failing to keep up with many of its followers turned competitors such as Samsung, LG and others. What did Sony do wrong? How could such an iconic brand get into trouble?
This article examines the brand lifecycle of Sony and more specifically address the issue of how Sony can rejuvenate itself and remerge as the global power brand and a force to reckon with. Brand and focus One of the highly discussed topics in branding is the relevance of maintaining consistency for brands in the current market place which is characterized by diverse cultures, increasingly empowered consumers and ever changing trends and consumer preferences. Consistency is often mistaken by brands for complacency or static existence.
Consistency in the branding lexicon refers to the ability of the brand to convey to the consumers in a single voice across all customer touch points, the fundamental building blocks of any brand namely the brand identity, brand image, brand personality, brand essence, key performance indicators such as quality, features, price points and such. But such a consistency should not come at the cost of the brand refusing to constantly adapt to the dynamic market structure. Obviously carrying out these two seemingly contradictory things becomes highly challenging.
Such a complex maneuver proves even more difficult for an established brand such as Sony, as it will have entrenched brand structure, and brand management practices. Even though there are many specific reasons for Sony’s slide from the top, at a corporate level, Sony’s inability to manage consistency while constantly changing appears to be at the root of Sony’s decline. Sony’s iconic ascent and recent descent – An analysis An analysis of Sony’s ascent to global prominence and the reasons for its slide from the pinnacle during the last couple of years brings to fore some pressing reasons.
Three major factors contributed to Sony’s ascent to global supremacy in the consumer electronics sector and they are: Innovation: Innovation, to a great extent, defined the brand character of Sony. Sony grew to global prominence due to its ability to constantly create products even before other companies could conceptualize them. Further, Sony had the ability to sense the hidden consumer demand and create entire product categories through its innovative products. When Walkman was introduced into the market, there was no existing market for portable music.
But Sony’s innovative product brought about an entire generation of products and created a new category altogether. Such an innovative culture differentiated Sony from the other consumer electronics brands for a very long time. Visionary leadership: Sony is a classic case to prove the strategic importance of a visionary leader in carrying a brand to dizzying heights. Sony’s management team along with the CEO was responsible to create an environment that nurtured experimentation, and innovation.
Further, Sony was one of the early Asian brands to recognize the importance of branding, which was again supported and lead by the management team. Pioneer advantage: Given the innovative edge, Sony emerged as the pioneer in almost every sector that it was operating in. Being the first mover or in many cases, the inventor of the category, Sony had a great leeway in defining the rules of the game as it were. It set the expectations for the other companies that entered the category.
Also, the brand image was enhanced every time a competitor imitated Sony as it became an indirect way to accept Sony’s leadership position. Being the pioneer also offered Sony an opportunity to make more mistakes, test new ideas, and experiment with innovative concepts. As can be seen, each of these three factors lead into each other thereby creating a virtuous circle. The combination of these factor pushed Sony into the exclusive club of iconic brands. But over the last decade, Sony seems to have lost the magic formula. It has been gradually sliding down from its high seat.
Many reasons have contributed to Sony’s decline: Unrelated diversification: An important and unique factor that has distinguished several Asian businesses from other Western business is the extent of diversification. Controlled and managed largely by business families, companies blow up into conglomerates that does business in very diverse and unrelated industries. Many Asian companies such as Samsung and LG that have become global forces to reckon with also started as bloated conglomerates. But these companies seem to have learnt the importance of focusing on core competence.
As such, Samsung trimmed down its organization, came out of unrelated industries and channeled its resources around one or two dominant businesses. But Sony still seems to have stuck up in multiple businesses. This sort of unrelated diversification not only drains the brand's resources to a great extent but also diverts the brand focus from the core of the brand. Innovation dearth: Case of Apples’ iPod explains this point very well. Walkman made Sony the undisputed leader in portable music player category. As is the usual case, success breeds corporate complacency.
As such, Sony did not follow up with any outstanding and innovative product line to sustain the initial success. Apple came out with iPod that appealed to the younger generation worldwide and also established its standard iTunes from where consumers could download songs for a nominal payment. This not only established Apple as the undisputed leader in mobile music market but also helped Apple to establish the industry standard. This dented Sony’s brand reputation. Sony has suffered similar challenges from many brands such as Samsung, Nokia, LG and others in different product categories.
Sony’s lack of consumer oriented innovation has contributed greatly to its decline in recent years. Lack of brand evolution: Sony’s past surely contributes an enormous amount of heritage, history and achievements into the brand identity. But for a brand to be successful in the current ultra competitive globalized market place, it has to make itself very relevant to the current customer segments. Harping back on past laurels and expecting the customers to still support the brand due to its past glory will be a grave mistake as has turned out in Sony’s case.
Sony has not been very successful in evolving as the brand for the new masses of the twenty first century. Apple, Samsung and a few others have hijacked that from Sony. As such, the brand has not been in with the times as it were and that has contributed to its slide from the top. Brand Rejuvenation - Guidelines From the discussion so far, it is clear that Sony has not been very prudent in managing its brand and its components very well over the last few years. But even then, Sony still continues to be one of the most valuable brands in the world. What should Sony do to regain its lost brand supremacy?
It seems ironic that for a solution Sony may want to look at a brand that prides itself on structuring its brand plan based on Sony's - Samsung Electronics. Samsung Electronics has been hugely successful in creating a brand from scratch and making the brand one of the top consumer electronics brand in the world. If Sony has to regain its lost brand supremacy, then it may want to follow some of the fundamental steps discussed below: Regain focus: Effects of unrelated diversification has been very pronounced for many family owned Asian conglomerates.
Operating in a number of unrelated businesses is often justified on the logic of scale and scope economies. But from a brand perspective, such diversification will be more detrimental than helpful. Sony, like Samsung, should conduct a due diligence to evaluate the financial and brand worth of its different business units. Before the unrelated business units erode the equity of the core Sony brand, it would benefit Sony to come out of such businesses. Regaining focus and investing in nurturing and enhancing its core competence will be the first necessary step towards regaining brand leadership.
Elevate marketing/branding to the boardroom: Sony should revamp its departments that have a direct impact on creating strong customer perception for the brand - R&D, design, and marketing. For innovation to make any brand sense, it has to reflect consumer preferences. Innovation has to lead to products and services that would enhance the relationship between the brand and the consumer. For this to happen, R&D, design and marketing have to become more customer-centric. In other words, Sony needs to elevate the marketing function to the boardroom and enable marketing to take a lead of the business and the strategy.
Marketing and branding can no longer be relegated to a tactical level handled by marketing managers who hardly have an appreciation of the larger picture. Brand oriented leadership: Over the last couple of years, many brands have emerged from Asia that provide tough competition to Sony. Further, with the resurgence of many American brands, the market place has become extremely competitive. In such a scenario, Sony’s path back to brand supremacy can happen only if it is guided by a brand oriented leadership.
The CEO and the top management team at Sony should evaluate the meaning and identity of the Sony brand to its customers in these changing times and enable the brand team to innovate and lead the industries in which Sony operates in. Design, features and the cool factor: Given the aggressive strategies of Apple, Nokia, Samsung and others along with their superiority in design, customer oriented features and the loyal following of “cool” customers, it becomes very important for Sony to regain the cool factor and beef up its designs and features.
Relevance to current customers and the ability to morph into a brand that can reflect customer needs prove very crucial for Sony as it charts its path back to the top position. Conclusion The brief market euphoria that would follow the launch of PlayStation 3 should not be confused with long term brand success or the return of Sony as it were. Even though this latest product will allow Sony a much need breather, it should just be a starting point for Sony’s resurgence. Sony, by methodically evaluating its brand culture and following the steps described above, could surely rejuvenate itself in the long run.